China's August iron ore imports slip as smog curbs hit steel mills

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BEIJING, Sept 8 (Reuters) - China’s imports of steelmaking raw material iron ore fell slightly in August from the previous month, according to Reuters calculations based on customs data on Saturday, hit by output curbs on steel mills as the government battles pollution.

Arrivals totalled 89.3 million tonnes last month, down from 89.96 million tonnes in July, according to Reuters calculations.

That compares to 88.66 million tonnes in August last year.

Official data from the General Administration of Customs showed that in the year to date, imports hit 710 million tonnes, down 0.5 percent.

“Steel mills reduced their replenishing demand for raw materials due to continued anti-pollution measures and environmental inspections,” Zhuo Guiqiu, an analyst at Jinrui Futures, said before the data was released.

Utilisation rates at blast furnaces at steel mills across China fell to 66.16 percent in mid-August, the lowest level since early April, data from the Mysteel consultancy showed.

The country’s main steelmaking hub, Tangshan city, said this week it would continue to carry out production restrictions in September.

That comes after mills there were ordered to cut output capacity by as much as 50 percent over a six-week period from July 20 to Aug. 30.

Meanwhile, teams of inspectors have been sent by the central government to the provinces of Shanxi and Shaanxi to check environmental issues from Aug. 20 to Nov. 11, which could crimp production activity in the region.

Zhuo expects iron ore demand to be focused on high-grade fines and pellets, with mills looking to boost production efficiency.

Average profit margins at Chinese steel mills remain at around 1,000 yuan ($146.30) a tonne, just below record levels seen in November last year, according to Huatai Futures.